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Illustration: Binay Sinha
The margins and profits of companies in India remain vulnerable to changes in crude oil prices in the international market. Historical quarterly data from listed companies (excluding banking, financial and insurance, oil and gas and energy sectors) indicate an unfavorable correlation between operating margins and crude oil prices.
In 2020-21 (FY21), an increase in core operating margins of companies was observed following a sharp decline in crude oil prices in the first half of calendar year 2020 following the outbreak of the pandemic.
For example, operating margins reached a record high of 20.3 percent of net sales in the October-December quarter of 2011.
First print: April 12, 2024 | 12:28 pm IST